How Rising Insurance Costs Could Lead to Bankruptcy in Florida
- McMann, P.A.
- Mar 20
- 3 min read
Florida’s insurance market crisis is putting financial pressure on homeowners, businesses, and individuals across the state. As property insurance rates continue to soar and coverage becomes harder to obtain, many Floridians are facing financial instability. For some, rising insurance costs could lead to bankruptcy.
At McMann, P.A., Attorney Mark McMann assists individuals in Lakeland, Tampa, Orlando, and throughout Central Florida in understanding how these economic pressures may impact their financial future and whether bankruptcy is a viable solution.
What’s Happening in Florida’s Insurance Market?
Florida has one of the most volatile insurance markets in the country, and recent developments have made things worse:
Rising Premiums: Homeowners' insurance rates have skyrocketed, with Florida’s average cost nearly three times the national average.
Insurance Companies Leaving the State: Several major insurers have pulled out of Florida, leaving homeowners scrambling for coverage.
Hurricane & Disaster Costs: The increasing frequency and severity of hurricanes have made insuring Florida homes more expensive.
Tighter Policy Restrictions: Many insurers are denying claims or reducing coverage, forcing homeowners to pay more out-of-pocket.
How Do High Insurance Costs Lead to Bankruptcy?
For many Florida homeowners and businesses, insurance costs are becoming unaffordable, leading to: ✔ Missed Mortgage Payments – Higher insurance premiums are pushing up monthly mortgage payments, making it harder to stay current on home loans. ✔ Unmanageable Debt – When insurance claims are denied, homeowners often take on credit card debt or personal loans to pay for repairs. ✔ Foreclosure Risks – As insurance costs rise, some homeowners can no longer afford to maintain their properties, leading to foreclosures. ✔ Business Closures – Small businesses are seeing rising commercial insurance rates, making it difficult to stay profitable.
Will Insurance Market Problems Increase Bankruptcy Filings?
Economic experts predict that Florida’s insurance crisis could lead to an increase in bankruptcy filings due to:
More Foreclosures: Homeowners unable to afford rising premiums may fall behind on mortgage payments, leading to bankruptcy as a last resort.
Increased Personal Debt: Many are relying on credit cards and loans to cover home repair costs when insurance policies don’t pay out.
Small Business Bankruptcies: Business owners are struggling to afford liability and property insurance, which may push them into financial distress.
How Bankruptcy Can Provide Relief
If high insurance costs have made it impossible to stay afloat financially, bankruptcy may offer a path forward:
Chapter 7 Bankruptcy – Eliminates unsecured debt (credit cards, personal loans) and may help those facing foreclosure.
Chapter 13 Bankruptcy – Allows homeowners to restructure their debts and catch up on missed mortgage payments.
Automatic Stay Protection – Filing for bankruptcy immediately halts foreclosures, creditor harassment, and lawsuits.
What Can You Do to Protect Yourself?
If rising insurance costs are making it hard to manage your finances, early intervention is key: ✔ Review Your Budget: If your insurance costs are consuming too much of your income, look at options to cut expenses elsewhere. ✔ Seek Legal Advice Before Foreclosure or Lawsuits Begin: A bankruptcy attorney can help assess whether filing for bankruptcy is necessary or if other options are available. ✔ Explore Alternative Insurance Options: Some homeowners may qualify for state-run insurance programs or catastrophe-specific policies.
McMann, P.A. Can Help You Find Financial Relief
At McMann, P.A., we help Florida residents navigate financial challenges caused by rising insurance costs. If you are struggling to keep up with mortgage payments, credit card debt, or other expenses, we can help you explore bankruptcy and other debt-relief options.
Mark D. McMann
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